https://www.profitconfidential.com/gold/whats-really-happening-in-the-stock-market/ What's Really Happening in the Stock Market Michael Lombardi, MBA Profit Confidential 2006-01-23T10:45:34Z 2012-02-16 10:49:36 In my opinion, Friday was a terrible day for the stock market, causing severe technical damage to big-cap and blue-chip stocks. Not only were moving averages broken by the popular indices, but, more significantly, the Dow Jones closed below its lowest level of the preceding month Archives,Economic Analysis,Gold,Gold Stocks,Recession,U.S. dollar

You may recall early last week when I wrote an article, "A Roaring Start to the New Year," and talked about how little faith I had in the big-cap stock rally that started at the beginning of January. I even gave my "logical reasons on why the rally in the Dow Jones Industrial Average will be short-lived."

Well, the rally that started in big-cap stocks came to a grounding halt this past Friday with the Dow Jones falling 1.96% -- the popular index's biggest one day drop in almost three years.

Something else -- very important -- happened on Friday. The yield curve inverted Friday for the second such incidence in less than two months. For a time on Friday, you could have bought a two-year U.S. bond that that would have yielded more than a 10- year U.S. bond. In the past, when this has happened, the U.S. has sunk into a recession.

While I'm not going to think too much about a yield curve that has failed to significantly diverge, I'm going to listen to what the big- cap stock market told me on Friday past.

In my opinion, Friday was a terrible day for the stock market, causing severe technical damage to big-cap and blue-chip stocks. Not only were moving averages broken by the popular indices, but, more significantly, the Dow Jones closed below its lowest level of the preceding month. And with 29 of the Dow Jones' 30 stocks being down on Friday, I have absolutely no reason to change my bearish stance on the general stock market.

Most of the popular financial media reading I read this weekend said Friday's correction was overdue... that everything is good in the stock market. I find this hard to believe.

What's really happening in the stock market?

Too few people are writing or talking about why gold is moving up so rapidly. And too few people are writing or talking about the debt crisis in America. But if you ask me, if you look at the price action of gold bullion... if you look at how damaging our debt crisis could be to the economy and the U.S. dollar... you'll have your answer on where big company stocks are headed.

What’s Really Happening in the Stock Market

By Michael Lombardi, MBA Published : January 23, 2006

You may recall early last week when I wrote an article, “A Roaring Start to the New Year,” and talked about how little faith I had in the big-cap stock rally that started at the beginning of January. I even gave my “logical reasons on why the rally in the Dow Jones Industrial Average will be short-lived.”

Well, the rally that started in big-cap stocks came to a grounding halt this past Friday with the Dow Jones falling 1.96% — the popular index’s biggest one day drop in almost three years.

Something else — very important — happened on Friday. The yield curve inverted Friday for the second such incidence in less than two months. For a time on Friday, you could have bought a two-year U.S. bond that that would have yielded more than a 10- year U.S. bond. In the past, when this has happened, the U.S. has sunk into a recession.

While I’m not going to think too much about a yield curve that has failed to significantly diverge, I’m going to listen to what the big- cap stock market told me on Friday past.

In my opinion, Friday was a terrible day for the stock market, causing severe technical damage to big-cap and blue-chip stocks. Not only were moving averages broken by the popular indices, but, more significantly, the Dow Jones closed below its lowest level of the preceding month. And with 29 of the Dow Jones’ 30 stocks being down on Friday, I have absolutely no reason to change my bearish stance on the general stock market.

Most of the popular financial media reading I read this weekend said Friday’s correction was overdue… that everything is good in the stock market. I find this hard to believe.

What’s really happening in the stock market?

Too few people are writing or talking about why gold is moving up so rapidly. And too few people are writing or talking about the debt crisis in America. But if you ask me, if you look at the price action of gold bullion… if you look at how damaging our debt crisis could be to the economy and the U.S. dollar… you’ll have your answer on where big company stocks are headed.

Dear Reader: There is no magic formula to getting rich. Success in investment vehicles with the best prospects for price appreciation can only be achieved through proper and rigorous research and analysis. We are 100% independent in that we are not affiliated with any bank or brokerage house. Information contained herein, while believed to be correct, is not guaranteed as accurate. Warning: Investing often involves high risks and you can lose a lot of money. Please do not invest with money you cannot afford to lose. The opinions in this content are just that, opinions of the authors. We are a publishing company and the opinions, comments, stories, reports, advertisements and articles we publish are for informational and educational purposes only; nothing herein should be considered personalized investment advice. Before you make any investment, check with your investment professional (advisor). We urge our readers to review the financial statements and prospectus of any company they are interested in. We are not responsible for any damages or losses arising from the use of any information herein. Past performance is not a guarantee of future results. All registered trademarks are the property of their respective owners.